In a country where procurement is still graduating as an extended admin function, JLL has added a whopping $12 million through savings in procurement over the last six years. Aval Sethi, Head – Supply Chain Management & Procurement, Asia & Integrated Facility Management, in an exclusive interview with Mohana M, reveals the successful implementation of technology-driven supply chain management and procurement strategies and his most-favourite “One-Source Platform”.
How successful are the integrated procurement strategies in FM today? Is there a different strategy of procurement at different levels of the supply chain?
Yes, and no, both. Yes, because procurement is normally broken up into a number of steps. At the base level, procurement is very transactional in nature, focusing around day-to-day requirements. At the mid-level, it could be procurement at the manager level focussing on localized purchase for the facility or could be at the pan-India or pan-regional level looking at a larger base. However, at the next level, it is more around building strategy for the organization, focussing on value addition, consolidation with suppliers, building supplier relationship, grooming and developing suppliers to meet requirements and becoming partners to the organization.
At the chief officer level, procurement takes a different approach, as it involves working with stake holders — mostly from business orientation — it could be your clients or the CFO or other people in the business. Procurement involves understanding and meeting their requirement. At every level, there is a distinct flavour to procurement.
As far as monitoring of the whole process is concerned, it largely depends on the structure with proper delegation of responsibilities at various levels. There will be an objective check for each person with designated and specific deliverables. However, stronger organizations will have a stronger governance workflow to make sure that people are aligned and fulfilling what is expected of them.
How have you been successfully integrating different procurement strategies at different levels through the years?
Six years back when I joined JLL, the focus was more on FM delivery and meeting client requirements. A structural change was brought about in 2009 when one of the big contracts required extensive delivery through procurement. It gave me an opportunity to actually build up a robust structure to improve the business given my background and knowledge on procurement. It was literally like a green field project!
Over the years, the same structure has evolved to include changing requirements and expectations. However, at JLL, in the last 2-3 years I have moved procurement from being just a functional support entity into a more entrepreneurial based function, bringing more value to the business. From that perspective, I started looking at vendor consolidation, relationship building, value engineering, e-based program for our suppliers, different revenue streams within the supply chain and adding more to bottom line directly through efficient supplier management. We have evolved our supplier segmentation model which is a pyramid structure where the strategic suppliers sit at the apex. The model is structured around how we develop our suppliers and bring about those strategic suppliers to add value to our business. It has been a very evolving and pro-active structure in supply chain.
Today, I have the privilege of being a member of the IFM executive committee and know where the business is headed, what the future is and what we are planning to do. Therefore, I am proactively involved and am able to bring up the procurement organization to readily deliver to business as required.
[box type=”shadow” ]“It is very important today for procurement professionals at any level to be in line and knowledgeable about their business; its needs and how it is changing. So whether it is the chief procurement officer or head of procurement, he or she can therefore mould the ‘procurement organization’, as it has become a backbone to the organization. The CFOs today are realizing that procurement does contribute directly to the bottom line. Thus, rather than the transactional or a knee jerk reaction to event or event based procurement, if the ‘procurement organization’ knows the plan of the business, they can strategize and delivery exceptionally well to the requirement.”[/box]
